4 Reasons why it’s important to keep an Emergency Fund
So admittedly, I went down on the internet rabbit hole this week, and discovered that not many people keep an emergency this is a very alarming statistics trend, that are worth discussing. There’s a lot of them and I don’t even know where to begin because this is just the tip of the iceberg, we’ve had companies issuing shares to the record paced cash in OR the recent stock market rally, Wells Fargo stopped making loans to the independent congruship, halt of the millstone believed the recession is going to last longer than the great recession of 2008, and have being cutting back on their spending, home prices have gone up but as soon as it’s expected to drop half of CFO’s expected from to retracts back to 19k.
So anyway, instead of covering each of this topics individually, I thought it would be more interesting to summarize the most important parts all in 1 video because for emergency all of these are going to have an impact on the future of your money what this means for the future of our economy and whether or not we’re selling ourselves got another stock market drop.
So With that said, first things first, let’s talk about a few of these headlines that seemingly a little but troublesome especially if it means we could be in for some turbulent times ahead. And they brings us to this because it was found that US companies issue more than 60 bills worth of stocks in maybe the biggest amount ever as prices rallied from a worth of rocks in May the biggest amount ever as proves rallied form a potential recovery.
In other words, companies saw the prices of the stock going back up and they decided to give up more stocks for them to buy. It’s no different than if you discover your toilet paper was selling for 500 and you think to yourself at that Point , I ant as well sell it if someone KS willing to give me 500. Well in a way that’s exactly what companies are doing too, now on the surface I will admit it does seem a little bit concerning, generally, you will only sell something if you fell like this person buying it is going to pay more than what you can do with it.
So maybe in a way this could be perceived that some of the companies feel as the stock prices are overvalued and there using this as an opportunity right now to cash out not in the bigger picture, this I’d very common and many companies sell of their shares to raise money now.
And it makes sense that they would want to walk in the current price going around just in case that they would want prices to be going back up. So I got to say, even though the headline is alarming it does makes sense by doing this companies are going to be able to have more cash on hand to whether a downtown if they’re going to be selling at a time when everyone else is buying and even though we could see a stock market deep in the future. It doesn’t guarantee that this is a sign of that happening after all test this back in February, when the stock prices passed 800 a share and they saw that as an incredible opportunity to live up on a whole bunch of cash before the stock price eventually went back down and it did end up going back down but not before going back up again even higher now than when they offered the stocks in the first place.
So all of this is rather unpredictable and its not necessarily a sigh that the market is going to be dropping in prices buy it’s a sign that companies devote in holding on to more cash right now. And they’re finding that right now is the best time to do so. And then of course of everything goes to plan they’re going to have more capital and cash on hand to whether it down or turn it and come back ahead more profitable.
Or if the company fires drop this, companies cashed in at a high price and the investor gets stock holdings the bag and then still puts the company in a better position then the future because it means they were able to get more cash, either way there is risk, but companies raising money as they should at a time where the stock price is high is to be expected and that would just be the smart move to take for any company who are in need of more capital, the next function agenda for the day is that the company that is no strange to headlines.
And that would be the Wells Fargo and the reason for the denouncement that they would no longer be issuing auto loans for independent Co dealers, prio to the whole illness Wells Fargo was one of the largest lenders for auto loans and in the first quarter their auto loans business grew almost 20 percent with 6 billion dollars revenue.
So where are all of a sudden they stopped issuing loans and settlement brings us to the auto loans Crisis according to the New York fed, sub loans auto loans delinquency did not reach it’s all time high this quarter with 68b dollars with of auto loans more than 90 days late.
And Vancouver is another prominent auto lender and the 25% of the auto loan borrowers asked for a federal payment in nearly 1 of 5 borrowers have enrolled in the federal payment by the end of March.
So it’s so surprising that it’s a huge number and that’s very concerning to lenders what even more surprising is that the delinquency rate for prime loans meaning when someone has a good credit score it revives at record low. With sub prime numbers with a bad credit score.